MARKET REPORT
(Unburdened by what has been)
Mittenwald and the Karwendel mountains. 1890
You were found in clear conditions. But you’re handsome in the Fog.
Day in Review:
Today:
(Kamalanomics: Govt-manipulated data with un-reported historic downward revisions to make the economy look more favorable):
DATA:
– US Empire Fed Manufacturing exploded higher (smashing expectations by six standard deviations in September, +11.5 vs -4.0 exp, vs -4.7 prior)
– Disappointing China activity data
– Dovish BoC Macklem comments to FT
COMPANIES:
– IBM increased to a 45-year high of 216.51 USD. Over the past 4 weeks, IBM gained 12.35%, and in the last 12 months, it increased 46.82%.
– Blackstone increased to an all-time high of 152.80 USD. Over the past 4 weeks, Blackstone gained 11.06%, and in the last 12 months, it increased 34.23%.
– Red Lobster exits Chap 11 bankruptcy protection
– Guardian Pharmacy IPO ($974m val)
– AAPL’s 16 pro demand lower than expected
GENERAL:
– Stocks in Lithuania Hit 15-month High
– Rubber futures traded around 185 US cents per kg, reaching their highest since February 2021, driven by supply concerns stemming from adverse weather conditions. Super Typhoon Yagi has severely impacted key Southeast Asian producers, including Thailand, Vietnam, and Malaysia, during the critical supply period. Firmer oil prices also supported prices. Meanwhile, the demand outlook remains pessimistic as China, the world’s largest buyer, continues to report downbeat economic data, casting uncertainty over future demand.
– Hamas Chief congratulates Houthi’s on recent operations on Israel
– Top commodity gainers are Canola (4.43%) and Cotton (2.57%). Biggest losers are Oat (-3.66%), Wheat (-2.80%)
– Equities mixed, Treasuries up, Crude up, Dollar down
Coming Up:
– German ZEW Sentiment, US Retail Sales, Canadian CPI, US Industrial Production, Business Inventories, NZ Current Account
Speakers:
– ECB’s Elderson; Fed’s Logan; BoC’s Rogers
MAJORS:
DX:
– The Federal Reserve will release its latest rate decision on Wednesday 18th September at 19:00 BST/14:00 EDT, alongside the updated Summary of Economic Projections (SEPs).
The focus will lie on the rate decision with market pricing leaning towards 50bps, but the analyst consensus is for 25bps, with recent articles from the WSJ and FT, as well as commentary from former NY Fed President Dudley shifting market pricing since the analyst surveys were released.
However, not many analyst desks appear to have revised their calls since these updates, with both JPMorgan and Goldman Sachs retaining their calls (JPM sees a 50bp cut, GS sees a 25bp cut).
There will also be attention on the Summary of Economic projections and the statement to gather expectations for the pace of the Fed’s easing process, particularly through the year-end.
The Bloomberg survey expects the Fed to pencil in the median 2024-end dot at 4.9% (prev. 5.1% in June SEP), while 44% of economists surveyed expect the Fed will tweak the statement to acknowledge the possibility of further adjustments, and 31% expect the Fed would signal the intention to pursue a string of rate cuts and provide guidance on their pace.
Attention will then turn to Fed Chair Powell at 19:30 BST/14:30 EDT to explain the Fed’s decisions with participants cognizant of any guidance updates from the Chair, and the discussion around 25 or 50bps for September . Report courtesy of newsquark.
AUD:
– Antipodeans firmed despite soft China economic data over the weekend with dollar weakness driving price action while both currencies pared the weakness seen on Friday, also both rising above the 21dmas, AUD: 0.6733.
EUR/GBP
– ECB’s de Guindos and Kazmir spoke, with de Guindos noting that the ECB wants to keep all options open when it comes to rate decisions, while Kazmir said the ECB will almost surely have to wait until December for the next rate cut, noting it would take a significant shift in the outlook for the ECB to cut in October. Note, that money markets currently assign just a 27% probability of an October cut.
– BoE rate decision this week, where analysts look for rates to be left unchanged in a 7-2 vote split. Market pricing currently assigns a 36% chance of a cut although this looks too high given the current UK economic backdrop, with pricing appearing to reflect the recent dovish Fed repricing.
YEN:
– Japan was away overnight, holiday
EQUITIES:
Nasdaq bounced higher off its 50DMA
EUR:
– DAX -0.38% 18,629
– FTSE 100 +0.06% 8,278
– CAC 40 -0.21% 7,449
– Euro Stoxx 50 -0.32% 4,828
US:
– SPX +0.13% 5,633
– NDX -0.47% 19,423
– DJIA +0.55% 41,622
– RUT +0.31% 2,189
Sectors (W to S): Technology -0.95%, Consumer Discretionary -0.32%, Real Estate +0.21%, Consumer Staples +0.29%, Industrials +0.53%, Health +0.59%, Utilities +0.74%, Communication Services +0.89%, Materials +0.90%, Energy +1.20%, Financials +1.22%.
– Apple: TF Securities analyst Ming-Chi Kuo estimates total sales of about 37mln units for the iPhone 16 on its first weekend, with pro series demand lower than expected.
– Boeing: Announced measures to preserve cash during the strike and putting a hiring freeze into effect, according to CNBC. Halting orders for parts of 737, 767, and 777 and said it’s suspending non-essential CapEx and facilities spending.
GOLD/SILVER:
– Consolidation at record highs:
OIL:
– WTI crude oil futures rose above $70 per barrel on Monday, extending a 1.4% gain from the previous week, driven by ongoing disruptions to US Gulf oil infrastructure and expectations of a US interest rate cut. Nearly 20% of Gulf of Mexico oil production remains offline due to Hurricane Francine. Also, investors are increasingly betting on a larger 50-bps rate cut by the Federal Reserve, which could boost economic activity and increase oil demand. However, concerns persist over slowing demand after Chinese data showed the longest stretch of industrial slowdown since 2021, with weaker-than-expected investment, raising doubts about China’s 5% growth target. Meanwhile, Libyan oil exports dropped significantly amid stalled UN-led talks over central bank control.
BONDS:
Yields lowest since JUNE ‘23
CRYPTO
– The largest digital asset slid as much as 3.9% to $57,505 on Monday. Tokens including second-ranked Ether and meme-crowd favorite Dogecoin also nursed losses.
The first US rate cut in more than four years heralds looser financial conditions, typically a positive backdrop for riskier assets such as cryptocurrencies. But investors are uncertain about the magnitude of the move anticipated for Wednesday, as well as how markets will react to updated projections from Fed officials — the so-called dot plot — and Chair Jerome Powell’s briefing.
“The cut is less important than the signaling during the press conference and the release of the updated dot plot,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets. “If the guidance and press conference is significantly dovish, we’d expect Bitcoin to outperform to the topside.”
Today we gave back Fridays gains
KEEP DOING WHATS WORKING, STOP WHAT ISNT
Best of luck out there. Let the market come to you
Post of the day:
https://www.youtube.com/watch?v=DKfcZ7nP_4Y
Song of the day:
https://www.youtube.com/watch?v=d2IrAw2cfeI
Joke of the Day:
https://www.youtube.com/watch?v=hbmaNr3edYI
(Seize all assets of Duke and Duke enterprises)
I can be contacted should anyone have any questions, input at [email protected] during US hours of EST 9am until 5pm
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